Markets Brazil bets big on batteries
Source：pv magazine
Solar deployment has been a success story in Brazil, but the need for more battery energy storage capacity is increasingly urgent.
The Brazilian energy storage market is at a turning point. Driven by rising energy bills, the instability of the electricity grid and a search for greater autonomy, the sector is expected to grow exponentially between now and 2030, even in the absence of definitive regulation. The Brazilian Association of Storage Solutions (ABSAE) estimates that the country could reach 25 GW of installed capacity and attract BRL 44 billion ($8 billion) in investments during this period. The combination of distributed generation, electromobility, extreme weather events, and pressure for energy reliability is shaping a new demand profile that requires scalable, flexible and economically viable solutions.
Against this backdrop, pv magazine Brasil reached out to executives from companies operating in the country to understand their plans regarding technology and industrial development, as well as the challenges they face. These conversations revealed a sector in transition that is betting on technology, financing and new business models to sustain its growth trajectory.
Storage challenge
The cost of storage technology in Brazil has been falling consistently: average battery pack prices fell by 20% in 2024, reaching $115/kWh, and should reach $69/kWh by 2030. High energy tariffs – according to the Brazilian Energy Trading Association (Abraceel), energy costs at an average of BRL 308 ($55)/MWh for consumers in the regulated market – and a frequent lack of transmission capacity are factors that make storage a promising tool for reducing costs, improving supply reliability, and increasing self-consumption. This scenario favors applications in various segments, from residential to industrial, including isolated communities and grid services.
Even so, Brazil is experiencing a paradox. While the technical and economic need for batteries is increasingly evident, the market continues to be held back by a regulatory vacuum. The lack of clear rules on licensing, connection, use of the network, and remuneration for services provided by batteries, such as energy arbitrage, capacity reserve, and ancillary services, inhibits investment and postpones the development of a strategic sector.
Brazil’s National Electric Energy Agency (Aneel) – the body responsible for regulating and supervising the Brazilian electricity sector – launched a public consultation on regulatory hurdles in the latter half of 2023, but this has yet to result in effective regulation. A battery capacity reserve auction, initially scheduled for 2025, is not expected to take place until 2026, according to representatives from Aneel and the Ministry of Mines and Energy (MME).
Modular configurations
Lithium-iron phosphate (LFP) battery technology has already been consolidated as a standard among manufacturers operating in Brazil for residential, commercial and industrial applications. For Marcello Schneider, director of commercial vehicles and solar at Chinese battery manufacturer BYD, LFP batteries offer robustness, safety and excellent thermal performance.
Caio Lentini, operations director at Deye, another Chinese manufacturer operating in Brazil, said that the company already sells solutions ranging from 2 kWh to 5 MWh, with the possibility of modular connection for larger systems. Flexibility is a key attribute: off-grid systems, hybrids and intelligent backup models are gaining ground with solutions adapted to each consumer profile. Partial or total vertical integration of the supply chain is also a competitive strategy. Carlos Trotta, country manager for Chinese battery supplier Dyness, noted the importance of developing an intelligent battery management system (BMS) and fire suppression systems.
Industrial expansion
Companies with local operations, such as Brazil’s UCB Power, also stand out. UCB Power produces more than 72,000 lithium batteries a year and is Brazil’s first domestic manufacturer of LFP technology, according to the company’s product engineering manager, Roberto De Luca.
The “BESS-as-a-service” model, in which consumers access the benefits of storage without purchasing the equipment outright, is gaining traction among manufacturers and integrators in Brazil. Deye’s Lentini pointed to a battery operating in the northern state of Pará with this format.
Other major battery manufacturers do not yet have production facilities in Brazil, but are increasing their presence in the country. Fox ESS Brazil Country Manager Robson Meira noted the company’s GMAX line, which is already implemented in factories and recharging stations. Huawei CTO Roberto Valer highlighted the company’s partnership with local distributor Matrix Energia as an example of a storage offering without direct sales to end customers, with 70 MWh already delivered and 200 MWh in the pipeline. SecPower CEO Gabriella Reigada also confirmed that the company is developing solutions with this model.
Even with the regulatory scenario undefined, the market is beginning to move. Installed storage capacity in Brazil tripled between 2023 and 2024, according to energy consultancy Greener, although it remains below 1 GWh. Growth is occurring mainly in isolated systems (70% of the total), but there is also progress in the commercial and industrial segments. The main drivers are operational reliability, savings on tariffs (via load shifting and peak shaving), decarbonizing processes, and reducing diesel costs in remote areas.
Great expectations
The regulatory maturity of distributed solar generation, signs of falling lithium prices, and the expectation surrounding auctions are all positioning the sector for a new investment cycle. BYD’s Schneider said that “batteries will play a strategic role in a scenario of accelerated expansion of solar and wind generation, contributing to the reliability of the system and enabling more flexible operations, such as those in the free market.”
Valer, from Huawei, noted the importance of storage for frequency regulation, voltage control, and supporting the high penetration of renewables.
At a public hearing in the Chamber of Deputies, Aneel said that it plans to publish the first storage standard in the second half of 2025, covering concession and connection rules, contract models, remuneration for services provided with the possibility of revenue stacking, and guidelines for future auctions. In addition, the government has proposed 10-year contracts, with supply beginning in July 2029 and four hours a day of dispatch under the command of the electricity system operator. The sector expects this initiative to be one of Brazil’s deliverables for the COP 30 conference set to take place in the coastal city of Belém in November 2025.
Calls for urgency
Opportunities are multiplying with the prospect of growing storage capacity in the Amazon region, integration with electric vehicles (vehicle-to-grid and vehicle-to-home), hybrid plants with solar and wind, and the production of green hydrogen. The 2034 Ten-Year Energy Plan (PDE) already forecasts the need for an additional 5.5 GW of generation capacity by 2028 and 35 GW by 2034. The reduction in the share of hydroelectric plants and the increase in intermittent renewables make the adoption of storage systems a matter of urgency.
In general, the sources stress the urgent need for legal certainty, regulatory modernization and clear incentives. The technologies are ready. What is lacking is the stability to scale up. Brazil has all the necessary ingredients: a growing solar base, high energy tariffs, regions with low electricity reliability and an industry willing to invest. The key element that still needs to be consolidated is regulation: clear, modern and courageous.